S&P500 Daily Action Areas & Price Targets 27/8/26

***QUOTING ES1! FOR CASH US500 EQUIVALENT LEVELS, SUBTRACT POINT DIFFERENCE***

SPX PUT/CALL RATIO 1.05 (The numbers reflect options traded during the current session.) A put-call ratio below 0.7 is generally considered bullish, and a put-call ratio above 1.0 is generally considered bearish.

GS Flow Desk: large S&P 31Aug 7000/7950 strangle in roughly $20mm vega / $115mm premium …My Read – classic “big convexity versus carry” trade: either someone paid a lot to own a wide August move, or someone got paid a lot to bet that the S&P stays comfortably inside the 7000–7950 corridor

JHEQX Q3 Collar Short Call Cap: ~7,750 – 7,900 - Long Put Strike: ~7,050 – 7,100 (approx. 5% downside protection) Short Put Strike: ~5,950

DEC2025 OPEX to DEC2026 OPEX is 945 points giving us a range of [5889,7779]

WEEKLY BULL BEAR ZONE 7620/00

WEEKLY RANGE RES 7795/7806 SUP 7595/72

MONTHLY RANGE RES 7838 SUP 7258

DAILY VWAP BULLISH 7686

WEEKLY VWAP BULLISH 7634

MONTHLY VWAP BULLISH 7503

DAILY STRUCTURE - BALANCE - 7720/7655

WEEKLY STRUCTURE - BALANCE - 7838.5/7542.75

MONTHLY STRUCTURE - OTFH - 7345.75

Balance: This refers to a market condition where prices move within a defined range, reflecting uncertainty as participants await further market-generated information. Our approach to balance includes favouring fade trades at the range extremes (highs/lows) while preparing for potential breakout scenarios if the balance shifts.

One-Time Framing Higher (OTFH): This represents a market trend where each successive bar forms a higher low, signalling a strong and consistent upward movement.

One-Time Framing Lower (OTFL): This describes a market trend where each successive bar forms a lower high, indicating a pronounced and steady downward movement.

DAILY BULL BEAR ZONE 7735/45

GAP FILL 7766.25

GAMMA FLIP 7684

DELTA FLIP 764]75

TECHNICAL EQUALITY OBJECTIVE 7626

DAILY RANGE RES 7780 SUP 7640

2 SIGMA RES 7848 SUP 7572

VIX BULL BEAR ZONE 17.3  (VVIX / VIX) 5.41

TRADES & TARGETS 

LONG ON ACCEPTANCE ABOVE DBBZ TARET DAILY RANGE RES

LONG ON REJECT/RECLAIM OF WBBZ TARGET RTH CLOSE 7690

***ADDITIONAL SETUPS & TARGETS HIGHLIGHTED ON THE CHARTS***

(I FADE TESTS OF 2 SIGMA LEVELS ESPECIALLY INTO THE FINAL HOUR OF THE NY CASH SESSION AS 90% OF THE TIME WHEN TESTED THE MARKET WILL CLOSE ABOVE OR BELOW THESE LEVELS)

EQUITY & MACRO AFTERNOON BRIEFING Market Tone: Tech Rebound & Oil Flush | SPX +0.3% | NDX +0.6% | RTY +0.5% | 10Y 4.625% | VIX 15.43

GOLDMAN SACHS FICC & EQUITY TRADING DESK TAKE: TECH LEADS REBOUND AS OIL PLUNGES ON DIPLOMATIC CHATTER

Equities closed higher in a classic Tech-led rebound, reversing recent momentum drag as AI-linked chips and infrastructure names caught a firm bid ahead of high-stakes earnings from NVDA and MRVL. Lower yields—driven by a steep drop in oil prices—provided broad tailwinds across European and US markets, with Treasury yields falling 6 to 8 bps across the curve.

The dominant macro catalyst was a -5% drop in WTI oil (slumping to $81.10), driven by headlines suggesting progress in US-Iran backchannel talks regarding the Strait of Hormuz. Conversely, the retail footprint took a heavy hit: Dick’s Sporting Goods (DKS) crashed 31% after missing earnings and slashing guidance, triggering broad supply across the athletic footwear/sportswear complex. Economic data tilted negative, marked by a miss in New Home Sales and Consumer Confidence dropping to a seven-month low (89.4), though the labor market differential saw a slight bounce.

SPECIAL INTEGRATION: GOLDMAN SACHS PRIME BROKERAGE & MACRO FLOWS

1. Positioning Reset & De-risking Dynamics:

  • Tech De-grossing: Following the initial August rebound, GS PB data recorded the largest percentage de-grossing in Info Tech in over two years, driven almost entirely by long sales. US L/S Net leverage dropped -3 pts to 48.3% (a 1-year low), marking the largest weekly decline in ~5 months.

  • AI as the New Cyclical: The 60-day correlation between Cyclicals/Defensives and S&P 500 ex-AI (SPXXAI) has collapsed to negative levels. The market is treating AI as the core economic growth proxy, while ex-AI equities act as defensive anchors. Consequently, NVDA’s print is the ultimate test of the broader macro growth narrative.

2. Debasement Trade & Crypto Liquidation Event:

  • Scarcity Bid: Renewed attention on Gold, Silver, and Crypto driven by fiscal trajectory concerns, USD weakness, and Treasury long-end yield management.

  • Historic Short Squeeze: August 19 saw nearly $3B in crypto liquidations (overwhelmingly shorts)—the 8th largest liquidation event in crypto history, and the only top-10 event to occur during a market rally, signaling aggressive repositioning into scarce assets as liquidity shifts.

3. Energy Crowding Risk & Rates Convexity:

  • Energy Overcrowding: GS PB logged the largest percentage net buying in Global Energy in nearly four years (bought 12 of the last 13 weeks). This extreme positioning leaves the sector highly vulnerable to rapid unwinds on genuine Middle East de-escalation headlines (as teased by yesterday's late-day oil sell-off).

  • Rates Convexity: CTAs sit near maximum short levels in rates. While the fundamental hurdle for a sustained bond rally remains high, extreme short positioning offers significant upside convexity if energy-driven disinflation continues to pull yields lower.

4. GS Institutional Take on NVDA & WFE Outlook:

  • NVDA Estimates: GS sits 6% / 12% above Street EPS consensus for 2Q/3Q, anticipating Datacenter strength and the start of the Rubin ramp in 3Q.

  • Options Setup: Options imply a 5.4% move. Key catalysts include details on the $500B financing platform, Rubin 2H ramp trajectory, gross margin sustainability (75%+), CPU upside from agentic AI, and hyperscaler ROI discipline.

  • WFE Supercycle: GS Research materially raised global WFE forecasts: 2026 at $150B (+36% YoY), 2027 at $218B (+45%), and 2028 at $281B (+29%).

MACRO & COMMODITIES

  • Crude Oil Breakdown: WTI (-460bps to $81.10) shed ~$2 in the final 15 minutes of trading on speculation of an "interim framework" between the US and Iran (via Oman/Pakistan mediators) to restore shipping traffic. While Iran noted Hormuz will remain restricted until terms are fully met, markets aggressively priced in near-term de-escalation.

  • Gold ($4,667, +33bps): Holding gains near session highs. Commodities trading desk notes gold remains bound in the $4,500–$5,000 range. Rates remain hypersensitive to tomorrow's PCE inflation print and Jackson Hole messaging—a hawkish surprise retests the 200DMA, while a soft print keeps momentum toward $5,000 intact.

  • US-Canada Trade Friction: Tensions spiked after Canada announced it will double counter-tariffs on US steel and aluminum to 50%, backed by a C$7.5B domestic business support package.

TRADING DESK & SECTOR COLOR

1. Consumer / Footwear & Sportswear (Briggs Barton & Alex):

  • The Take: DKS’s earnings collapse prompted heavy short-pressing across DKS, NKE, and LULU, alongside long liquidations in AS.

  • Buy-side Sentiment: Zero appetite to defend the group. Institutional desk flow reflects deep concern over a protracted destocking and innovation-lacking footwear cycle, compounding a weakening consumer backdrop. Minor short-covering was visible only in ONON and BIRK.

2. Healthcare & Biotech (Jackie Bukzin):

  • The Take: Therapeutics/Biotech rallied, but buy-side participation was "eerily quiet." Dedicated healthcare investors used the strength as an opportunity to reduce risk and sell into the move rather than chase it. Flows skew net-sell.

BUYSIDE BARS: KEY EARNINGS ON DECK

1. Nvidia (NVDA) | Reports Tomorrow AMC | Implied Move: 4.6% (Street) / 5.4% (GS Options)

  • Positioning Score: 3 (Leaning Long)

  • Buyside Bar: Q3 Revenue $94B–$95B; Q4 Guide $107B–$108B (whisper numbers reaching $110B+, though wafer supply remains the hard constraint).

  • Setup: Stock trades ~6% off its Aug 14 peak. Sentiment is warming on GB300 rack ramps, Rubin Ultra visibility, and potential pricing power. Derivatives desk flags upside opportunities in implied vol (<5%).

2. Marvell Technology (MRVL) | Reports Aug 27 AMC | Implied Move: 8.8%

  • Positioning Score: 1 (Light)

  • Buyside Bar: Q3 QoQ Revenue +15%; Guide +12% QoQ (~50% YoY).

  • Setup: The market has yet to fully credit the transformational Google partnership expansion ($20B p.a. implied vs. $12B consensus). Upside surprise in datacenter/ASIC programs could yield a sharp re-rate against light positioning.

SPECIAL THEMATIC EXCERPT: DEUTSCHE BANK ON AI DISRUPTION & FX

  • The Thesis: A 30-currency cross-country framework ranking labor market exposure and trade balances highlights the UK (GBP) as having the widest distribution of macro outcomes ("fat tails") due to AI collapsing the marginal cost of knowledge work.

  • Why GBP: The UK faces the highest combined exposure due to a large domestic service workforce coupled with a heavy reliance on net exports of AI-impacted services (7.2% of GDP) while importing goods and non-exposed services.

  • Policy & FX Strategy: Highlights the importance of the UK AI Economics Institute for policy planning. With longer-dated EUR/GBP implied volatility historically depressed, option structures like strangles offer an efficient way to trade long-term structural variance without taking a directional view on the outcome.

PORTFOLIO ACTION & TACTICAL SETUP

  • Macro Bias: Tactically Bullish (Lower Conviction). The tape must digest tomorrow’s PCE print (Headline expected at 3.65% YoY; Core at 3.28% YoY) and Chair Warsh at Jackson Hole. Hot inflation + aggressive Fed tone risks triggering a 3%–4% SPX pullback via higher bond yields.

  • The Playbook: Maintain the Tech/Cyclicals Barbell. Rotate AI concentration into Mag7 + Software, and spread cyclical exposure toward Financials, Energy, and Metals/Miners to benefit from market broadening and persistent dollar debasement dynamics. Healthcare serves as a primary defensive hedge against Midterm election seasonality.